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Senate Passes Financial Reform Bill

The Senate passed a sweeping bill Thursday evening to overhaul financial markets regulation.
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WASHINGTON, D.C. (

TheStreet

) -- The Senate passed a sweeping bill Thursday evening to overhaul financial markets regulation.

The bill, passed by a vote of 59-39, will now go to a conference committee for reconciliation with the House of Representatives' measure, which was approved in December.

The legislation aims to prevent a recurrence of the near-meltdown of big Wall Street investment banks and the resulting taxpayer-funded bailouts. The Senate version of the bill includes a controversial amendment that would require bank-holding companies to spin off their lucrative derivatives-trading operations.

The measure also calls for new ways to watch for risks in the financial system and makes it easier to liquidate large failing financial firms. It proposes new rules for complex securities blamed for helping start the 2008 economic crisis, and it creates a consumer protection agency.

The legislation would impose limits on the largest, most interconnected banks and require proof that borrowers could pay for mortgages.

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"Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we've seen in the past few years," Obama said earlier Thursday after the

Senate voted to invoke cloture

, or conclude debate on the bill after numerous failed attempts.

The financial industry, the president said, had tried to stop the new regulations "with hordes of lobbyists and millions of dollars in ads."

The Associated Press contributed to this report

.

This article was written by a staff member of TheStreet.com.